Contracting has a specific failure shape. The bid is usually within range. The realized margin is not, and the difference shows up in four places.

The four leaks

  1. Unbilled change orders. The most common and the largest. Work performed, nobody signed, nobody billed.
  2. Labor hour drift. The estimate assumed a good crew on a clean site.
  3. Material creep. Quoted three weeks ago, bought last week.
  4. Cash timing. Profitable on paper, borrowing to make payroll.

The number to run first

Bid margin minus realized margin, across the last five completed jobs. If you are bidding 22 percent and realizing 11 percent, you do not have a sales problem, and hiring a salesperson will make it worse faster.

Change order discipline in one policy

Nothing extra gets built without a signature. Put it on a phone form, one page, price and time impact stated. Crews resist for two weeks and then it becomes normal. This single policy is worth more than most marketing spend.

Crew math

Adding a crew before your realized margin is fixed multiplies the leak. Fix margin, then add capacity. The order matters more than the timing.

Try it on the decision in front of you

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